Hear the latest on Brexit and February seasonal market tendencies, from Ashraf Laidi.

Global stock indexes resumed their rally after a bounce in Asian markets following the People’s Bank of China’s (PBOC) biggest injection in over a year. But the news on the Coronavirus front remain worrisome as cases exceed 20,600 and fatalities hit 425. The U.S. Dollar is stronger across the board and the Great British pound (GBP) rebounds back above 1.30 on stronger than expected construction.

Crude oil tested key support levels before bouncing on talk of a possible OPEC cut.

Clashing statements from the UK and EU were a reminder that nothing is easy in Europe and that Boris Johnson's promise of a deal by the end of the year is a longshot. The pound sank to 1.2990 from 1.3175 as it wiped out the gains of the prior two days and closed at the lowest since Jan. 12.

It's clear that both sides are going to be playing games, starting with the EU's Michel Barnier who said he offered a deal but only if the UK agrees to its rules. Johnson rejected the offer only minutes later. It was a reminder that it will be a bumpy road toward a deal, if one ever comes. Political headlines will be a constant headwind.

Elsewhere, sentiment was positive outside of crude oil. A risk-on bounce couldn't halt a drop that's now extended to 24% from the peak of the U.S.-Iran flareup. Worse still, WTI crude fell below a triple bottom at $51 and broke $50 for the first time in 12 months. OPEC+ continues to make noise about a production cut, but the market is already signaling that it won't be enough. Meanwhile, U.S. 10-year yields bottomed at 1.50%

A quick look at the February seasonals:

  •  February, March and April are the three best months historically for WTI crude
  • Bitcoin has climbed in five straight years in February.
  • US natural gas is at a four-year low, but February is the worst month.

US Crude oil (WTI) rose in February in each of the last 15 years, with the exception of 2018, 2013 and 2006.

Would you like to get these Intraday Market Thoughts in your mailbox? Click here. You can see Ashraf’s daily analysis at www.AshrafLaidi.com and sign up for the Premium Insights. Ashraf will be discussing fractals in the FX market and his global macro outlook at the TradersEXPO New York on March 8.